Tobacco black market costs Balkans $335 million a year in lost taxes

[September 26, 2019]   ZAGREB (Reuters) - Around 600,000 people in the countries of former Yugoslavia buy tobacco products on the black market, hitting tax revenues by a combined 306.7 million euros ($335.3 million) a year, according to a survey published on Thursday.

The survey of 21,000 people by the Zagreb Economic Institute estimated smugglers and illegal sellers of tobacco make a total profit of around 200 million euros a year in Slovenia, Croatia, Bosnia, Serbia, Kosovo, Montenegro and Northern Macedonia.

The combined population of the countries is about 20 million.

Purchases of black market tobacco are highest in Bosnia and Serbia, the survey showed.

"In the last ten years the losses in tax income were mostly felt in Bosnia and Montenegro where 9% and 6% of gross domestic product respectively were lost," the institute said.

"Eight out of 10 smokers say they opt for the black market because of the lower prices. Two thirds of them say that higher living standards could make them stop buying cigarettes illegally," it added.

(Reporting by Igor Ilic; Editing by Mark Potter)

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